Every company in Indonesia must be incorporated according to a prescribed set of steps. However, some prospective company owners might be wondering if this process can be accelerated by skipping certain steps which could be unnecessary. To learn more about this matter, read this FAQ.
There are many details and steps to be completed by anyone who intends to incorporate a company in Indonesia. Some of these steps can be somewhat time-consuming and complex. Therefore, some people who plan to incorporate an Indonesia-based company might be considering their options regarding the possibilities of evading certain incorporation steps which they might believe to be unnecessary.
The Incorporation Process in Indonesia
Before the start of the incorporation process in Indonesia, the type of business entity to be used must be selected. Among the business entities which may be selected in Indonesia include the locally-owned company (PT), the foreign-owned company (PT PMA), the representative office, the joint venture, and the sole proprietorship (UD), among others. Once the business entity has been selected, the actual process may begin with the obtaining of valid incorporation documents. The name of the company must be selected and registered with the Ministry of Law and Human Rights before the prospective company owner may receive the incorporation documents. There are also statutory documents to be notarized and Articles of Association to be drafted.
After the statutory documents have been notarized, there are still many steps to be completed; these steps often include the input an approval of government authorities. These are the paying of the registration fee and obtaining of the receipt (to be filed with the Trade Register), the filing of all notarized documents which are to be approved by the Ministry of Law and Human Rights, the application for any necessary business licenses which are to be approved by any relevant ministries or authorities, the registration for the purposes of employment with the Ministry of Manpower, the registration for social security purposes, the obtaining of a tax identification number (NPWP), and the obtaining of a value-added tax (VAT) number. A registered address in Indonesia will also be required, as well as a permanent license for business operations.
If none of the steps listed are bypassed, the entire process of incorporation of a company in Indonesia will be expected to take approximately 35 working days to be completed.
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Why Each Step of the Incorporation Process Is Necessary
Returning to the topic of the process of company incorporation in Indonesia, no step of the process can be skipped because every step is important.
A registered company name is required so that the company can be clearly identified when it conducts any of its business activities. Incorporation documents must be approved as proof that the company has been legally incorporated and is operating within legal boundaries. Articles of Association must be drafted to provide details on how the company is to be run. The Ministry of Law and Human Rights must give their approval so that it is known that the company has official recognition from the government. A registered address is needed so that the company will officially have been established in Indonesia. As all companies in Indonesia are required to pay corporate tax and VAT, registrations for tax numbers and VAT numbers are necessities for all newly-incorporated companies in Indonesia. Certain business licenses must be obtained by business owners in specific industries for the conducting of certain business activities. A permanent license will ensure that the company has indeed been fully incorporated. Therefore, every step of the incorporation process is backed by an important reason.
Now that you understand why every step of the incorporation process in Indonesia is of utmost importance, you might now be interested in starting a company of your own in Indonesia. If such is true, you can always contact us at Paul Hype Page & Co. Our incorporation team will work with you so that your company will be set up in the proper manner. We will see to it that the incorporation of your company is in line with the laws and regulations imposed by the Indonesian government.